Financial Times

Chillies strapped for cash

By Natasha Gunaratne

The Chillies 2008 awards has met with some serious financial challenges according to a letter circulated to the heads of the advertising agencies by the President of the 4 A's and the President of the IAA Sri Lanka Chapter.

The letter dated September 9, 2008 said 'the two Associations are currently in need of funds to urgently meet commitments arising out of the Chillies 2008. Therefore, it has been decided to seek the support of the industry by requesting an advance against entries for Chillies 2009.

The letter further stated that 'the IAA and the 4 A's have appointed a committee that is studying this matter to resolve the issue with urgency.' Moreover, it is estimated that there will be a 30% increase in entry fees for 2009.

Those agencies advancing monies will have the rates frozen at 2008 rates exclusively in acknowledgement of their support. According to one advertising head, there have been some overruns from Chillies 2008 because the expenses of the event were not properly managed so the agencies are trying to catch up. The source said 'somebody slipped up' but the trustees are really the body which has to take responsibility for running the Chillies and they delegate it to the steering committee. The source added that so far, only one or two agencies have responded because the advertising industry is not in a position to bail them out.

Last year's Chairman of the Board of Trustees, Gerald De Saram said from what he can gather, the issue is that there was a serious shortfall in sponsorships due to economic issues.

A lot of sponsors including some of the bigger ones had pulled out at the last minute, as close as two weeks prior to the awards. "By then it was a little too late to start making adjustments to the show because advances had been paid," he said. "The steering committee decided to press on so they had to use some reserves in the trust."

Mr. De Saram added that some events were held after the Chillies to recover some of the money.

He added that businesses are struggling in the current economic climate and that caution will have to be exercised for next year's awards as well, perhaps even toning down the entire show.

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